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2018 (10) TMI 1779 - AT - Service TaxLevy of Interest and penalty - CENVAT Credit - common input service for providing both taxable as well as for the purpose of trading activities - appellant submits that interest and penalty demand cannot be demanded on the appellant on the ground that the appellant had sufficient balance in its Cenvat account during the period between taking of CENVAT Credit and subsequent reversal thereof - HELD THAT:- The department has not specifically alleged that the appellant had not maintained sufficient balance in its Cenvat account between the period of taking irregular Cenvat credit and subsequent reversal thereof. Taking of credit in the CENVAT account under such circumstances would be considered as a mere book entry inasmuch as there is no loss of revenue to the Government exchequer. Hence, it is not the case of Revenue that they have suffered loss owing to delayed reversal of Cenvat credit, which should be compensated by way of payment of interest. The law with regard to levy of interest on delayed reversal of CENVAT Credit is no more res integra in view of the judgementof Hon’ble Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT], where it was held that once the entry was reversed, it is as if that the Cenvat credit was not available. Interest and penalty is not leviable - appeal allowed - decided in favor of appellant.
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